The Fair Work Agency (FWA) has been introduced in April 2026, established under the Employment Rights Act 2025. The FWA has been created to strengthen enforcement of workplace rights and simplify how employment law breaches are investigated and addressed. For employers, the creation of the FWA represents a major shift in regulatory oversight. For employees, it offers a clearer route for the implementation of workplace protections.
Most importantly, the FWA now has the power to enforce compliance in areas that many businesses have previously viewed as administrative, such as the maintenance of accurate annual leave records.
Why Was the Fair Work Agency Created?
The FWA has been created as part of the government’s wider efforts to modernise employment rights enforcement. Before this, enforcement responsibilities were split between several bodies such as HMRC’s National Minimum Wage enforcement team, the Employment Agency Standards Inspectorate and the Gangmasters and Labour Abuse Authority. Consolidating these into a single enforcement agency is designed to improve consistency of employment rights, strengthen worker protections, increase investigation efficiency and provide clearer accountability for employers.
The FWA has the powers to investigate, inspect records, recover payment and issue penalties where breaches are identified.
What Does the Fair Work Agency Enforce?
The FWA will cover a range of statutory employment rights including:
- National Minimum Wage and National Living Wage compliance
- Statutory sick pay enforcement
- Holiday pay and annual leave entitlements
- Employment agency standards
- Labour exploitation and modern slavery protections
- Certain employment tribunal penalty enforcement
A significant change for employers is that the agency has authority to enforce annual leave compliance, something that has traditionally been dealt with through individual tribunal claims. There will now be regulatory scrutiny over holiday pay practices and record-keeping obligations that employers should be aware of.
What Powers does the Fair Work Agency have?
The FWA has investigatory and enforcement powers and inspectors are allowed to enter commercial premises and inspect employment records. They may require certain documents to be produced and copy or remove records for further examination. The agency can also issue warning notices and depending on their findings, may pursue enforcement proceedings.
Investigations may occur following employee complaints, whistleblowing disclosures or targeted compliance checks in high-risk sectors. For employers, this means thorough record-keeping is a regulatory necessity.
What Should Employers Do?
In order to minimise risk, employers should review their employment practices and ensure they are fully prepared for increased scrutiny. This includes reviewing their existing annual leave systems, ensuring they have comprehensive records for at least six years for annual leave and holiday pay records.
If you’re unsure on the new legal requirements or you need guidance on holiday pay and annual leave records, Premier Legal can help. We have extensive experience in employment law matters and our legal experts stay up to date with all regulatory changes, so you stay compliant. For advice or our HR retainer services, contact us today.
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Author
sarahrobinson@premier-legal.co.uk
Sarah Robinson is the Managing Partner and has specialised exclusively in employment law since qualifying as a solicitor in 1996.
Sarah has considerable experience of representing clients in many different industry sectors including insurance and financial services, corporate finance, technology, legal services, automotive, hotel and catering and media as well as the public sector.
Areas of particular interest include restrictive covenants, TUPE and advising in relation to discrimination.